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Alternative Dispute Resolution - Essay Example

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The paper "Alternative Dispute Resolution" argues that the process of alternative dispute resolution (or ADR for short) is not new to the present generation. However, its use is still relatively in the infant stage. Knowledge and information about it have not yet spread in impressive proportions…
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Alternative Dispute Resolution
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Alternative Dispute Resolution The process of alternative dispute resolution (or ADR for short) is not new to the present generation. However, its use is still relatively in infant stage. Knowledge and information about it have not yet spread in impressive proportions. No less than the Court of Appeal decision which is the subject of the instant analysis discussed this quite satisfactorily. In its paragraph 6, the verdict makes observation of the fact that many believe that the advantages of mediation or of ADR have not yet been sufficiently demonstrated.1 Although not exactly the same, ADR and mediation are interchangeably understood as synonymous. Anyway, there is no harm in so doing. Mediation is actually a class or a form of an alternative dispute resolution process.2 ADR therefore is the generic term. Arbitration, however, has a different meaning. We have to take notice of the variance because the case to be analyzed is also criticized for not distinguishing arbitration from mediation, although that aspect will not be included in this paper. Stated in another way, ADR is a collective description of methods of resolving disputes otherwise than through the normal trial process. It is one of several ways to resolve disputes outside the ambit of the courts or to make an attempt to settle the case if possible. It is a procedure where the parties are therefore given a chance to amicably patch up their differences over a certain dispute. This has to be done in view of the prospect that those involved in a controversy may be able to mend things without going to the court for a full-blown trial. That is why it is considered an alternative solution, meaning that it will take the place of court proceedings if the parties agree. The most logical reason for ADR is to stop the further clogging of cases in tribunals or judicial bodies and agencies. Courts all over the world are confronted by the humongous predicament of so many pending matters for the action or resolution of the judge or panel of judges.3 Why must the courts be unclogged of cases The simple answer to this is to give more quality time to the judges in deciding or resolving suits and other incidents brought before them for judicial determination. If judges have limited time to so decide or resolve, they cannot prepare good and well-studied rulings compared to when they have ample opportunity. From a macro viewpoint, decisions which are crafted under deadline pressures will not serve the ends of justice. It will become a matter of what is haste is waste. If courts are to make good decisions in a loaded environment, what will happen is that the more recent filings will have to wait. Resultant of that will be the slow disposal or resolution of cases. Of course, public opinion frowns upon tardy decisions under the caveat that justice that is delayed is like justice that is denied. A grievance that is addressed but not expeditiously as normally expected is the same as if there was no redress at all.4 How can ADR help the unclogging of cases in the courts The more cases that are resolved in the ADR or mediation level, the lesser the cases that will be forwarded to the courts for hearing or trial. Such a situation will give more elbow room and latitude for the judges in dispensing their functions more efficiently, effectively and speedily. What are the advantages of ADR Firstly, in resorting to the mediation process, the parties save on time, money and efforts if they finally come to an amicable settlement. And secondly, the hostilities among the enemies are reduced if not totally removed and amity, if there was any, is restored once the compromise agreement shall have been concluded. Halsey, in its paragraph 15, citing the distinguished Lord Justice Brooke in the case of Dunnett v Railtrack, credited skilled mediators for having achieved satisfactory results in many cases than could have been achieved in court proceedings.5 Taken altogether, the attendant features surrounding the use of the ADR process indicate that it is for the public good and welfare because it enhances order in the society. This conclusion leads to the strong suggestion that all means must be exhausted to push the use of ADR processes. Of course, those means must be within legal and procedural boundaries; otherwise, ADR might do more harm than good. The foregoing fundamentals are being laid down because the perceived importance of the ADR process must first be emphasized. With that done, a thorough examination should be made to determine if necessary measures must be taken to safeguard this out-of-court remedy. And if so, those necessary measures must be identified and defined. Under these premises, the case law here presented will be critically analyzed. Varied issues in several cases have been brought to courts questioning, contesting or reacting to the ADR process as to its necessity or propriety or both. There is one very provoking case on the serious issue of the enforceability of the ADR process. We refer to Halsey versus Milton Keynes (which, for brevity, is referred to as Halsey here). The subject matters in the suit were raised to the Court of Appeal6 Here are the facts. Bert Halsey, then aged 83, was a patient at the Milton Keynes General Hospital. He was fed through nasal drip and died as a result of liquid food entering his lungs. Because of the unfortunate incident, a dispute arose as to whether the negligence of the hospital personnel and staff caused his death. A coroner's inquest was held. However, the results of the inquest were not conclusive. Furthermore, two medical experts had disagreements regarding responsibility. A claim was brought against the NHS Trust by Lilian Halsey, the wife of the deceased. The claimant asked for bereavement damages and offered to refer the matter to the mediation process. Defendant Trust, which denied liability, stated that mediation was not appropriate in the dispute. The Trust won the case, the claim having been dismissed in June 2003. The claimant's solicitor requested that the costs of the litigation be awarded averring as grounds the refusal of the defendants to mediate. The original trial judge refused to award costs against the successful defendant. The trial court decision was appealed. There are two salient aspects of Halsey. First, it ruled that a court cannot require a party to proceed to mediation against his will on the basis that such an order would contravene the party's right of access to the courts under Article 6 of the European Convention on Human Rights. And second, it was held that to impose a sanction, particularly as to costs, on a party who has refused to give mediation a chance, the burden is upon the party seeking the imposition of the sanction to establish that the party who refused to mediation acted unreasonably.7 We go to the first issue which deals with the question of compulsory referral to the ADR process. In paragraph 7 of Halsey, the Court mentioned that in an announced ADR pledge, all Government departments and agencies made a number of commitments which included that ADR will be considered and used in all suitable cases wherever the other party accepts it. It is important to observe that even this pledge sets the condition that the other party accepts the ADR option. The ruling goes to continue that a number of initiatives had been introduced as a direct result of the pledge. It included the one initiated by the National Health Service Litigation Authority (NHSLA) which declared that "the encouragement of greater use of mediation, and other forms of alternative dispute resolution" is one of the options considered by the NHSLA. Proceeding further, Halsey enunciated in its paragraph 9 that "it is one thing to encourage the parties to agree to mediation" even in the strongest term. It is another thing to "order them to do so". The Court of Appeal added in the same paragraph that "to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction of this right of access to the court". It also cited the Strasbourg case, in relation to Article 6 of the European Convention on Human Rights, "that the right of access to a court may be waived" but such waiver should be carefully reviewed to ensure that the party claimant is not subject to constraint. Paragraph 11 of the ruling is more forceful, saying that "we reiterate that the court's role is to encourage, not to compel" even if the form of encouragement may be robust.8 The distinguished Sir Gavin Lightman (Lightman for short) echoed the concerns by expressing his objections to the ruling. Said Lightman: "No thinking person can but be disturbed by the imposition of the twin hurdles to mediation which the decision in Halsey creates to achieving the approximation to justice which the institution of the mediation process may afford".9 Lightman, a Justice of the High Court assigned to the Chancery Division and a nominated judge of the Administrative Court, stated that, in spite of the implications of the case, it was expedient that parties mediate matters. There are so many arguments regarding the principles raised in Halsey. Each one has its own justification. There are likewise many cases that focus on those principles. Every decision has also its own reasoning. In Shirayama Shokusan Ltd v Danovo Ltd, Mr. Justice Blackburne held that the court had jurisdiction to enforce mediation even if one of the parties was unwilling to refer the dispute to that kind of process.10 This case involved long-term tenants. This confirms the notion that settlement is valuable when the parties have a continuing relationship. It must also be stated here that many of the issues in Shirayama were relatively small.11 The stance to make ADR or mediation compulsory has gathered notable following. The Lord Chief Justice himself, Lord Phillips of Worth Matravers, once said that parties who refuse to mediate should explain themselves or face costs penalties.12 This is a strong declaration of advocacy toward mandatory referral to ADR. But still, it is subjective. If you refuse to mediate, you must explain. If you cannot explain, you face the risk of paying cost penalties. What if you can explain Last May 8, 2008, the Second Civil Mediation Council National Conference was held in Birmingham. On that occasion, Sir Anthony Clarke, Master of the Rolls, delivered a speech13 on the future of civil mediation. He strongly campaigned for compulsory ADR processes. He supported the vigorous criticisms of Lightman against Halsey. The speaker further cited that some European states like Belgium and Greece have already introduced compulsory ADR schemes without being challenged by the right of access provision of the European Convention on Human Rights. Likewise mentioned is the fact that compulsory ADR methods have now been introduced in a number of jurisdictions in the United States like the ones in New York and California. On the other hand, enforceability of mediation is not favored in some litigations. In Halifax Financial Services Limited v Intuitive Systems Limited (QBD 21 December 1998), the contracting parties had a set of clauses in their agreement which provided that "33.1 In the event of any dispute arising between the Parties in connection with this Agreement, senior representatives of the parties will, within 10 business days of a written notice from either Party to the other, meet in good faith and attempt to resolve the dispute without recourse to legal proceedings. 33.2 If the dispute is not resolved as a result of such meetings, either Party may, at such meeting (or within 10 business days of its conclusion) propose to the other in writing that structured negotiations be entered into with the assistance of a neutral adviser or mediator ('Neutral Adviser'). x x x 33.6 If the Parties accept the Neutral Adviser's recommendations or otherwise reach agreement on the resolution of the dispute, such agreement will be recorded in writing and, once it is signed by their duly authorized representatives, will be binding on the Parties. x x x 33.8 If the Parties fail to reach an agreement in the structured negotiations within 45 business days of the Neutral Adviser being appointed then any dispute between them may be referred to the Court unless within a further period of 25 business days the parties agree to arbitration in accordance with the procedure set out below." In this latter case, the court held that, taken as a whole, the contractual procedures in the quoted clauses were not mandatory. This meant that the parties did not have to comply with those provisions as a requirement before going to court. All that the contractual condition merely required was a negotiation in good faith. It could not extend farther, that is, to the point of compelling the parties, or any one of them, to endorse the controversy to mediation or any other ADR process.14 In other words, compelling a case to be referred to ADR or mediation will depend on the characteristics of each controversy. For example, there are suits which arise from commercial transactions and which have to be decided through the interpretation of the laws governing trade and commerce. Under this kind, if the parties wish the court to determine issues of law and construction or interpretation which might be essential to their future trading relations under an ongoing long-term contract, mediation is not appropriate. Why It is so simply because a mediator cannot provide a binding decision on such legal issues. However, even in instances similar to those stated in the preceding paragraph, there can still be exceptions. Such is true in cases where the contract between the parties provides referral to ADR. Thus, in Cable & Wireless v IBM, Colman J ordered ADR or mediation to proceed,15 first because of an agreement to refer to ADR. The second reason was that the parties must appreciate mediation "as a tool for resolution not designed to achieve solutions which reflect the precise legal rights and obligations of the parties, but rather solutions which are mutually commercially acceptable at the time of the mediation". The latter must be understood to mean that if the solution brought about by mediation is acceptable to the parties and is not contrary to law, morals, good customs, public order or public policy, there can be no problem. ADR or mediation may also not be advisable in issues where fraud is being alleged against a party.16 The reason is self-explanatory. If there is no more trust and confidence between the parties because of an alleged fraud committed by one, there is no reason for mediation to be effective and the other party has the right to refuse referral. Another example where ADR cannot be compelled is when there is really no visible sign of hope that the mediation process will work. For instance, A and B both claim to have respective rights over a piece of land. Thus, there is that possibility of litigation. In the meantime, A builds a house on that specific lot. We cannot blame B if he refuses mediation. Incidentally, the debate here is supposed to delve with concerns in general and not with the exceptions. Be that as it may, all facets must be prudently explored as possibly as can be. The time to ask has come. Are Lightman and Anthony Clarke and company correct There can be no exact and definite answers because there are no exact and definite circumstances. Nevertheless, from a wide scope of rational backdrops, Lightman is correct. So are the other proponents of compulsory mediation. Judges, being the managers of the cases before them, must be presumed to have the powers to order the parties, even unwilling ones, to refer their case to ADR. Using common sense, it is not actually compulsory. Why Because even if the parties are forced by the courts to initially use the mechanisms of ADR, but they could not later on have a compromise agreement on their respective claims, they will still go back to the courts. In essence, ADR is still under the processes of the court. Being such, compelling an unwilling litigant to proceed to mediation does not mean that he is deprived of his right of access to the courts. No question, there can be some delay. But this is caused by the very effort to allow the parties some space to amicably end up in peace. And if mediation prospers, such time drawback can be easily paid off. Of course, as already discussed, there are exceptions to this rule in allowing courts to issue orders mandating resort to ADR or mediation. Along these lines, we can likewise entertain the idea of rendering mediation as part of the pre-trial case management process. This was also propounded in the speech of Sir Anthonny Clarke on May 8, 2008 mentioned earlier. In conjunction with that proposition, it is worth mentioning Deweer v Belgium (1980) 2 EHRR 439, where it was asked whether or not mediation does or will require parties to waive their right to a fair trial. The answer is no, it should not. Mediation should always be viewed as a part of civil procedure,17 not a substitute for it. Upon the other hand, successful mediation should not waive the right to a fair trial or a court hearing. Instead, mediation makes trial or court hearing no longer necessary. The next question will now be settled. Is the Halsey verdict wrong Yes, as far as concerning its declaration that mandatory ADR violates one's rights of access to the courts. At this junction, it is well to note that another argument against ADR and mediation is that the litigant's rights are not fully defined. If compared to the court process of determining the rights and obligations of parties in a controversy, the judicial proceeding is more definite in its declared decision. That is where the right of access to the courts possibly becomes an issue. However, it must be reasoned out though that in a settlement, there are no losers and there are no winners. Both parties become recipients of peace. With all the pros and cons and all the long discussions on Halsey, there is this remarkable irony here. Some leading authorities have considered the Halsey decision as an obiter dictum insofar as concerning the issue of referral to the ADR process. This means that the matter of compelling a party to first give mediation a chance was not the main subject in Halsey. Strictly speaking, therefore, Halsey did not affect previous rulings holding that courts can compel the parties to submit their case to ADR. Thus, for instance, Halsey did not make obsolete the jurisprudence set in Shirayama Shokusan v. Danovo Ltd. (cited above) which pronounced that a court had jurisdiction to order mediation even when one party was unwilling. This decision was penned by Mr. Justice Blackburne in 2004.18 Owing to that obiter dictum comment of Halsey, it has, in fact, opened wide the door for the courts to issue compulsory mediation orders. Over and above all the debates on compulsory referral of cases to the ADR proceedings, what is totally important, proper and imperative is for one and all to embrace the reality that ADR and mediation remedies have a lot of help to offer the judges and the litigants in particular, and the public and the Government in general. To sum it up all, there must be a clear-cut judicial policy that makes mandatory the referral of cases to the ADR process except in very extra-ordinary instances where it is not the correct solution. If no swift action is taken toward the notion that ADR is so significant as to be made compulsory, there will be more rulings in the future adopting the principles in Halsey. It is of the essence that any further confusion cannot be allowed. This suggested reformulation of the rules needs to be acted upon with wise dispatch. The second issue for analysis in Halsey is that which pertains to who should suffer the sanction as to costs. Adjunct to that is the question of who has the burden of proving. Is it the party who refused mediation who must prove that he did not act unreasonably in so refusing Or is it the party who is asking for the imposition of the costs sanction who must prove that the other party acted unreasonably in refusing the invitation to mediation or to the use of the ADR process Universal civil law dictates obedience to the time-honored axiom that good faith is always presumed.19 Upon him who alleges bad faith lies the burden of proof. If we are to apply this to the issue at hand, it will be that the party who did not refuse mediation or ADR must have the burden of proving that the refusing party acted unreasonably in so refusing. It does not matter who the successful party is. Under these assertions, Halsey is correct although it has its own justifications which are validly correct. The decision apparently declares that he who unreasonably refuses to go to mediation must be sanctioned for costs. However, it favored the respondent Trust which refused mediation by not imposing the costs sanction. This is so because the Court believed that the complainant was not able to prove that the Trust acted unreasonably in refusing. This ruling was made on the strength of the stand that the complainant has the burden of proving that the refusal was baseless. In Part 44.3 of the Civil Procedure Rules (CPR), The Ministry of Justice has declared that courts have the discretion to decide on who pays the costs, the amount thereof and the time of payment.20 Under the general rule, the unsuccessful party pays. However, there are exceptions which have bearings on the conduct of the parties. These include conduct before and during the proceedings and, in particular, the extent to which the parties followed the Practice Direction or any relevant pre-action protocol. In this way, judgment would be rendered mainly in the form of sanctions for non-compliance with those guidelines for conduct. Halsey has followed the above rule, that it is the unsuccessful party who will be ordered to pay the costs of the successful party. This has to be so. It naturally means that if you are successful in the litigation, you are the party who proved true your claims. On the other hand, the losing party is always presumed to be the guilty party or the one who caused damage to the successful party. Definitely, the court cannot reward the guilty party. Hence, that guilty litigant is always the one who must pay the costs of the victor. What was just discussed is the general rule. The court may make a different order. Thus, the foregoing illustrations will change if there are some other incidents like mediation or ADR. Let us suppose that the claimant refuses to go to mediation. He opts for this because he is totally confident he will win the case if it goes to court. His refusal is not reasonable. And he wins the case. How will the award for costs be done and to whom As earlier suggested, the party guilty of refusing mediation must be made to suffer. However, the burden of proving that the successful party acted unreasonably is upon the unsuccessful party. Why Again because it is upon the one alleging bad faith to prove that there was. Unreasonable refusal is a badge of bad faith. In Nigel Witham Ltd v Smith & Anor ( No. 2) [2008] EWHC 12 (TCC) (04 January 2008,21 the England and Wales High Court, through His Honour Judge Peter Coulson QC, citing Halsey, reiterated the principle that for the party to be awarded costs because the other party refused to agree a referral to ADR or mediation, it is for the former to prove that the refusal of the latter was not reasonable. Simply put, the party who was willing to mediate have the burden of proving that the refusal of the unwilling party was unreasonable. In another case, Hurst v. Leeming [2002] EWHC 105122, which was decided before Halsey, the honorable Justice Gavin Lightman ruled that the refusal to mediate on the part of Leeming was reasonable. In view of that, no costs sanction was ordered against him (Leeming) even when he was the party unwilling to mediate. On the basis of the grounds thoroughly taken into consideration in this discussion, it is safe to conclude that the Halsey ruling on sanction as to costs is perfect and does not need criticism. The foundations that hover over the subject principle are supported by common sense, logical reasons and generally accepted rules of procedures. There is no point for debate. This is buttressed by the finding that the cases cited appurtenant to the topic are in agreement with Halsey. References 3rd Report on monitoring the effectiveness of the Government's commitment to using Alternative Dispute Resolution (ADR), July 2005, "There is an important difference between 'conciliation' and 'mediation', the two most popular forms of ADR", 2nd Paragraph Basic Position. emplaw.co.uk British employment law DCA. Accessed June 3, 2009. http://www.emplaw.co.uk/researchfree-redirector.aspxStartPage=data%2f047apr99.htm Eric Suter reports on the move towards enforced mediation. Part one. Discussion Required. New Law Journal. 31 October 2008. Discussion required Part one. Accessed May 24, 2009. www.parkchambers.co.uk/(2008)%20158%20NLJ%201525.pdf General Rules About Costs Part 44. Rules and Practice Directions. Civil Procedure Rules. Procedure Rules. Ministry of Justice. Directgov. Accessed June 3, 2009 http://www.justice.gov.uk/civil/procrules_fin/contents/parts/part44.htm Geoff Brewer. Brewer Consulting an FTI Company. 24 May 2000. Accessed June 2, 2009. http://www.brewerconsulting.co.uk/cases/CJ0020RR.htm Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002. Neutral Citation Number: [2004] EWCA (Civ) 576. Case No. B3/2003/1458 and B3/2003/1582. Accessed May 23, 2009, http://www.hmcourts-service.gov.uk/judgmentsfiles/j2515/halsey-v-mkg.htm Hurst v Leeming [2002} EWHC 1051. 9 May 2002. Accessed May 24. 2009. www.a-level-law.com/caselibrary/HURST%20v%20LEEMING%20%5B2001%5D% Justice delayed is justice denied. May 2008. Wikipedia The Free Encyclopedia. Accessed June 3, 2009. http://en.wikipedia.org/wiki/Justice_delayed_is_justice_denied. Lord Chief Justice calls for greater take up of ADR. News. CEDR. 12 May 2008. Accessed June 3, 2009. http://www.cedr.com/index.phplocation=/news/archive/20080512_304.htm Lord Phillips of Worth Matravers, Lord Chief Justice of England and Wales (speech). Alternative Dispute Resolution: An English Viewpoint. India. 29 March, 2008. Accessed June 3, 2009, http://www.judiciary.gov.uk/docs/speeches/lcj_adr_india_290308.pdf Michael Kenney. "The bickering stops here. Mediation may prove a cure for clogged courts - if only more people knew about it". The Boston Globe. August 7, 1995. Encyclopedia.com. Accessed June 3, 2009. http://www.encyclopedia.com/doc/1P2-8338789.html Neil Andrews. Part III: Alternative Civil Justice. 10.14 Page 202. The Modern Civil Process. Accessed June 2, 2009. http://books.google.com.ph/booksid=1fgCRRefVZ4C&pg=PA202&lpg=PA202&dq=shirayama+shokusan+co+ltd+v+danovo+ltd+2004+1+wlr+2985&source=bl&ots=zqSAH34_g3&sig=YOOgMTwl5oLvZbdi4vqbUw074qY&hl=tl&ei=pfklSuTOJomIkAWh5djXBg&sa=X&oi=book_result&ct=result&resnum=1 Nigel Witham Ltd. v Smith & Anor. (No. 2) (2008) EWHC 12 (TCC). Neutral Citation Number: [2008] EWHC 12 (TCC). Case No: HT-06-374. St. Dunstan's House. 133-137 Fetter Lane, London, EC4A IHD. 4th January, 2008. Bailii. Accessed May 23, 2009. http://www.bailii.org/ew/cases/EWHC/TCC/2008/12.html Pare' v. Bonin [1977] 2 S.C.R 342. Citing Art. 2202 of the Civil Code. Good faith is always Presumed. He who alleges bad faith must prove it. 1975-04-01. Supreme Court of Canada. Accessed June 3, 2009. csc.lexum.umontreal.ca/en/1976/1977rcs2-342/1977rcs2-342.doc Sir Anthony Clarke, Master of the Rolls (speech). The Future of Civil Mediation. The Second Civil Mediation Council National Conference. Birmingham. 08 May 2008. Accessed May 24, 2009. http://www.civilmediation.org/files/pdf/mr_mediation_conference_may08.pdf Read More
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